ABC Engineering Services

ABC Engineering Services

Table of Contents Executive Summary... 3 Checklist... 4 Demographics and Risk Profile... 5 Specific Stop-loss... 8 Aggregate Stop-loss... 15 Stop-loss Carrier... 16 Learn More... 17 A note about privacy At Sun Life, we take the security and confidentiality of employee information very seriously. All reports include employer-identified data and aggregated employer data across industry and size. To protect privacy, we provide this report only to the employer (or its broker or administrator) that requested the report. The data engine behind Sun Life Stop-Loss Benchmark uses information from a variety of sources, including publicly available industry data; internal Sun Life Stop-Loss policyholder data; proprietary Sun Life underwriting and actuarial formulas; census data provided by the employer; and aggregated Sun Life Stop-Loss policyholders' medical data (with patient identities removed).

Sun Life Stop-Loss Benchmark provides insight to build and strengthen a self-funded strategy. Executive summary The health care landscape continues to evolve. Employers need relevant data to help them make decisions. That's important whether you're self-funded now or might become self-funded. Insight inside Sun Life Stop-Loss Benchmark is your customized view of the self-funded marketplace. It uses an employer's census combined with anonymous information from Sun Life's high volume of business. Data sources include 30,000 unique plans, 21 million individual census records, 4.9 million first-dollar claims records, and 100,000 stop-loss claims. Use your customized report to support your decision making. You can analyze your group's demographics and risk profile, gain knowledge of stop-loss coverage trends for your industry peers, and more. Source: Percentage of workers covered in a partially or completely self-funded plan comes from the Kaiser/HRET's Survey of Employer Sponsored Health Benefits, 1999-2016. Fifty-seven percent of self-funded plans have stop-loss according to Kaiser/HRET's 2016 Survey of Employer Sponsored Health Benefits, http://kff.org/report-section/ehbs-2016-summary-of-findings/. Number of employers that would consider self-funding comes from the 2016 Fully Insured Conversion Market Research Study, sponsored by Sun Life and conducted by Chadwick Martin Bailey. The study included initial decision makers for companies that have between 50 and 999 employees and offer medical benefits to their full time employees. Page 3

Checklist A guide to the key self-funded decision points It's important to assemble the right partners for your selfinsured medical plan. Your broker and Sun Life can help. Page 4

Demographics and risk profile Customized for your group's age and gender Use this chart to analyze your group's demographics. Group by age and gender Group by gender only Group by enrollment and gender compared to industry Employee only Employee plus dependent(s) Men Women Men Women Group Industry 49% 7% 39% 5% 33% 16% 40% 12% Average male age : 42 Average female age : 44 Source: Employer's group census (309 employees) and stop-loss quote requests that Sun Life received from Apr 2013 to Mar 2018 in employer's peer group, representing 668,062 covered employees. Results may not add up to 100% due to rounding. Page 5

Demographics and risk profile Customized for your group's age, gender and risk Use this chart to analyze your group's demographics and risk profile. Group by age and gender Group risk by age and gender Associated risk values Age bands Men Women 0-29 1.0 1.0 30-39 1.4 1.3 40-49 2.3 2.2 50-59 5.0 3.7 60+ 8.7 6.4 Assumes $75,000 specific deductible Lowest number: smallest liklihood of risk Highest number: largest liklihood of risk Source: Employer's group census (309 employees). This informattion is for general purposes only. Your current plan may perform differently based on your actual deductible and changes in the group. Page 6

Demographics and risk profile Customized for your group's age, gender and risk compared to your peer group Use this chart to understand your group's demographics compared to those of your peer group (a "peer group" is a set of groups that share a similar size and industry to your own). Your group's associated risk for women by age compared to your peer group Risk profile Group Peer group Your group's associated risk for men by age compared to your peer group Source: Employer plans representing 668,062 covered employees from stop-loss quote requests that Sun Life received from Apr 2013 to Mar 2018 in employer's peer group. Page 7

Stop-loss marketplace benchmarks Coverages and deductibles Use this chart to understand stop-loss trends. Stop-loss coverage by group size across industries Stop-loss coverage by deductible levels Source: Employer plans representing 30,092 employers from stop-loss quote requests that Sun Life received from Dec 2014 to Dec 2017 across industries. Page 8

Specific stop-loss benchmarks Trends in your peer group Use this chart to analyze Specific stop-loss coverage trends in your peer group (a "peer group" is a set of groups that share a similar size and industry to your own). Benefits covered under Specific stop-loss Terminal liability option Common claims basis Run-in Neutral Run-out 61% 15% 24% Run-in : Incurred period is longer than paid period (18/12) Neutral : Incurred period is equal to paid period (12/12) Run-out : Incurred period is shorter than paid period (12/18) Source: Employer plans representing 2,087 employers from stop-loss quote requests that Sun Life received from Mar 2013 to Mar 2018 in employer's peer group. Page 9

Specific stop-loss benchmarks Deductible trends in your peer group Use this chart to analyze Specific stop-loss coverage trends in your peer group (a "peer group" is a set of groups that share a similar size and industry to your own). A range of commonly selected stop-loss deductible levels $50,000-$99,999 deductibles $100,000-$149,999 deductibles Source: Stop-loss quote requests that Sun Life received from Mar 2013 to Mar 2018 in employer's peer group. A range of commonly selected stop-loss deductible levels chart - employer plans representing 2,087 employers. $50,000-$99,999 deductibles chart - employer plans representing 771 employers. $100,000-$149,999 deductibles chart - employer plans representing 775 employers. Page 10

Specific stop-loss benchmarks Customized projection of catastrophic claims Projected catastrophic claims above stop-loss deductible Use this chart to analyze the impact of the deductible selection on the number of projected catastrophic claims. Source: Projections based on employer's group size using Sun Life proprietary rating and actuarial formulas. These projections are for general information only. Actual incidence will vary. Page 11

Specific stop-loss benchmarks Odds of having a catastrophic claim Use this chart to understand the likelihood that an employer will have a catastrophic claim. 85% of all employers with a stop-loss deductible between $50,000 and $99,999 had a catastrophic claim during the year. Odds that an employer will have a catastrophic claim during the year Claim type Odds Percentage Malignant neoplasm 1 out of 2 Dorsopathies 1 out of 4 Leukemia, lymphoma, and/or multiple myeloma 1 out of 8 Chronic/end stage renal disease 1 out of 10 Congenital anomalies 1 out of 11 A single claim over $1 million 1 out of 89 Source: Analysis of 1,878 Sun Life Stop-Loss policyholders from 2012 to 2015 representing 7,978 claims. Page 12

Specific stop-loss benchmarks Common catastrophic claims Use this chart to help analyze potential costs by comparing common catastrophic conditions, first-dollar claims, and stop-loss deductibles. Impact of different specific stop-loss deductible levels on catastrophic claims Condition Deductible Chronic/end stage renal disease $75,000 Chronic/end stage renal disease $100,000 Congenital anomalies $75,000 Congenital anomalies $100,000 Dorsopathies $75,000 Dorsopathies $100,000 Leukemia, lymphoma, and/or multiple myeloma Leukemia, lymphoma, and/or multiple myeloma $75,000 $100,000 Malignant neoplasm $75,000 Malignant neoplasm $100,000 Source: Sample aggregated medical data for Sun Life Stop-Loss policyholders from 2011 to 2014 representing 115,192 claims with total 2,905,606,681.33 claim expenses (with patient identities removed). Page 13

Specific stop-loss marketplace benchmarks Deductible increases customized for your group Use this chart to see the changes in employers' risk tolerance over time. Deductible levels Percentage of employers that have increasesd deductibles yearly Historical patterns in deductible across industries $10,000 and under $10,001- $20,000 Increase range per $1,000 increments $20,001- $30,000 $30,001- $50,000 $50,001- $100,000 $100,001+ Your current deductible $49,999 and under 26% $50,000- $99,999 25% $100,000- $149,999 26% $150,000- $249,999 27% $250,000- $499,999 28% $500,000+ 17% 90% 5% 3% 2% 0% 0% 68% 18% 9% 3% 2% 1% 20% 16% 44% 16% 2% 1% 5% 5% 57% 25% 6% 2% 1% 1% 50% 33% 9% 6% 2% 0% 18% 40% 22% 18% Source: An analysis of 8,293 in force Sun Life Stop-Loss policies for years 2009-2016 using underwriter assumptions, premium and fee projections, and tax estimates. Information is provided for general information only. Benefits plans must meet all federal laws and guidelines. Sun Life is not a tax advisor. For guidance, consult a tax advisor. Page 14

Aggregate stop-loss benchmarks Aggregate trends in your peer group Use these charts to see risk protection trends in your peer group (a "peer group" is a set of groups that share a similar size and industry to your own). Average aggregate monthly attachment points Benefits covered under Aggregate stop-loss Common corridor percentages 125% corridor 120% corridor Other corridors 96% 3% 1% Source: Stop-loss quote requests that Sun Life received from Mar 2013 to Mar 2018 in employer's peer group. Average aggregate monthly attachment points chart - employer plans representing 922 employees. Benefits covered under Aggregate stop-loss chart - employer plans representing 1,152 employers. Common corridor percentages chart - employer plans representing 1,798 employers. Page 15

Stop-loss carrier High-quality attributes Use this list of attributes to help you choose a stop-loss carrier that can support your self-funded strategy. Page 16

To learn more, contact your Stop-Loss Specialist. Group stop-loss insurance policies are underwritten by Sun Life Assurance Company of Canada (Wellesley Hills, MA) in all states, except New York, under Policy Form Series 07-SL REV 7-12. In New York, group stop-loss insurance policies are underwritten by Sun Life and Health Insurance Company (U.S.) (Lansing, MI) under Policy Form Series 07-NYSL REV 7-12. Product offerings may not be available in all states and may vary depending on state laws and regulations. 2018 Sun Life Assurance Company of Canada, Wellesley Hills, MA 02481. All rights reserved. Sun Life Financial and the globe symbol are registered trademarks of Sun Life Assurance Company of Canada. Visit us at www.sunlife.com/us. GSLPB-4699 SLPC 26138 06142017 Page 17